EXHIBIT 10(n)


Mr. Donald M. Clements, Jr.
6355 Wayside Drive
Beaumont, Texas  77707


August 19, 1994


 Dear Don:


 This is to confirm your  acceptance  of our offer of  employment as Senior Vice
 President,  Corporate  Development  of  the  American  Electric  Power  Service
 Corporation, effective September 1, 1994 or as soon thereafter as you are able
 to begin work. You will report to me in this position.

 Among other duties that may be assigned,  you will be responsible for exploring
 and securing new business  opportunities  for the AEP System.  This may include
 possible alliances or combinations within the utility industry, non-traditional
 arrangements  with  major  customers,  and  the  deployment  of  our  extensive
 engineering expertise in new ventures.

 Your  starting  salary will be $170,000 a year and reviewed on an annual basis.
 You will be  entitled  to 20 days of vacation  annually  beginning  in 1995 and
 assigned a company car for business and personal use. Subject to their specific
 terms,  including  Board  approval as  necessary,  you will be eligible for our
 Management  Incentive  Compensation  Plan (MICP) upon hire, and our Performance
 Share Incentive Plan (PSIP) beginning January 1, 1995.

 The MICP  presently  has an annual  target award of 25% of base salary for your
 position,  100% of which will be based on Corporate Performance under the Plan.
 Actual  awards  may range  from 0 to 150% of target  and are paid as soon after
 year-end  results are  confirmed.  If you join the Company  prior to October 1,
 1994, you will receive a pro-rata award for 1994.

 The PSIP for your  position  presently  provides an annual award of 25% of your
 base  salary  converted  to AEP share  units at market  value.  Those units are
 subsequently  multiplied  from 0 to 200% to  establish  actual  awards based on
 comparative three year Total Shareholder Return.  Dividends are credited during
 the performance period and converted to equivalent performance share units.

 PSIP payments are made annually at the end of each three year performance cycle
 based on then share market value. The Board determines  whether payment will be
 in cash,  AEP  stock,  or a  combination  of both.  If in stock,  the Board may
 require its retention for an  indefinite  period.  At the end of your first and
 second  calendar  years of  employment  you  will be  eligible  for  transition
 performance awards of one-third and two-thirds respectively,  of the three-year
 performance award that is made for that year.

 As exceptions to our relocation expense reimbursement program, details of which
 will be separately  provided to you, we will provide you a furnished  apartment
 until May 1, 1995,  pending  relocation  of your family when school is out next
 spring. We will gross-up for the effect of income tax on this housing.  We will
 further  provide  you  a  $5,000  payment  to  cover  miscellaneous  relocation
 expenses, also grossed-up for tax.

 We will  recognize  all of your  employment  with Gulf States  Utilities  as if
 credited  service under the American  Electric Power pension plan. Your pension
 when you retire at any time after vesting will be based on your actual  service
 at  retirement  plus such  credited  service,  as if you had been  continuously
 employed for the combined  period.  It will be paid in two parts that  actually
 earned through AEP service and the credited service  supplement,  offset by the
 dollar amount of any retirement  benefits you are entitled to receive from Gulf
 States.

 You will be eligible  under their terms and  conditions  for all other  benefit
 programs and perquisites appropriate to your position and status as an employee
 and officer of the AEP Service Corporation.

 Our Human Resources  Department will send you documents  describing our benefit
 plans and other appropriate informational material by separate cover. This will
 include information regarding our relocation policy and relocation  assistance.
 They will also request certain  information to expedite the employment  process
 and to comply with applicable law.

 As this offer is contingent on your successful  completion of a  pre-employment
 physical,  they will advise you of the procedures to accomplish that as soon as
 possible.

 Don,  we are very  pleased  that you will be  joining  the AEP  System and I am
 personally delighted at the opportunity to be working with you again.

 Sincerely,

 /s/E. Linn Draper, Jr.

 E. Linn Draper, Jr.